The Internal Revenue Service is auditing $13.2 million of certificates of participation issued in 2009 by the Douglas County School District, No. RE1 in Colorado.
The school district disclosed the audit in an event notice filed with the Municipal Securities Rulemaking Board’s online EMMA system.
“The district is cooperating with the IRS in its examination of the certificates,” the notice said.
The district is located primarily in Douglas County, but a small portion of it is in Elbert County, Colo. just south of Denver. The Douglas County School District Finance Corp. is a nonprofit formed in 1997 to facilitate district financings, including the acquisition of real estate for lease to the district.
COPs generally entitle investors holder the certificates to receive a share, or participation, in the lease payments from a project.
The proceeds of the COPs were used to purchase leased property from the district. The district was to use the proceeds from the sale of that property to finance the costs of constructing and equipping a new school facility for North Star Academy West, a district charter school.
The underwriter was RBC Capital Markets. Sherman & Howard LLC was special counsel.